Delaware Issues Final Unclaimed Property Examination Regulations

The state of Delaware has issued its final Department of Finance regulations, effective on Oct. 11, 2017.

“UPPO worked diligently to bring a number of holder concerns with the draft regulations to the state’s attention. While not all issues were addressed, the state made several important changes,” said Jennifer Borden, a member of the UPPO Government Relations and Advocacy Committee’s Delaware workgroup, which drafted the comments. “We are delighted that our advocacy will lead to fairer results for holders under audit.”

As UPPO pointed out in its comments, the prior draft’s reliance on property with addresses in other states for purposes of estimating liability due to Delaware was at odds with the court’s decision in Temple-Inland. The final regulations refer instead to the use of “any available records” in Delaware’s samples. While not definitive about what records will be utilized, the final regulations do a better job of recognizing the significance of the Temple-Inland ruling and provide holders with more leeway in developing reliable sample populations.

UPPO’s comments also resulted in a key change in 2.18.3.2, which will lead to more accurate estimates of potential exposure. At UPPO’s urging, the regulations prohibit the state from using funds returned in due course in the error factor when estimating. Previously, the state would not consider as remediated an item that was resolved after the audit notice was issued.